Should You Sell Your Property Tenanted or Vacant?

Considering selling a tenanted property? This decision is crucial for your real estate success. We dig into the pros and cons of selling properties tenanted or vacant, providing insights into different investor needs and market scenarios.

Envision a selling process that aligns with your goals, whether it’s maximising returns or simplifying the process. Read on to discover key insights that will help you make a well-informed decision in the real estate market.

The Case for Selling Vacant

When contemplating the sale of a property, opting for a vacant possession offers distinct advantages. This approach not only enhances the property’s presentation but also provides greater flexibility for both the seller and potential buyers.

Let’s explore how selling a vacant property could streamline the sales process and potentially yield a more lucrative outcome.

Advantages of Selling Vacant

1. Presentation Control: A vacant property offers you complete control over its presentation. This could include staging, which can significantly enhance the property’s appeal and potentially its sale price.
2. Immediate Availability for Buyers: Vacant properties are attractive to buyers who wish to move in immediately, without the complications of existing tenancies.
3. Ease of Inspection: Without tenants, you can schedule property inspections at any time, making the process less cumbersome.

Disadvantages of Selling Vacant

1. Loss of Rental Income: Selling a vacant property means losing out on rental income during both the sale campaign and the settlement period.
2. Potential Financial Strain: If the property remains on the market for an extended period, this could lead to financial strain due to the absence of rental income.
3. Reduced Appeal to Investors: Some investors prefer properties with existing tenants, as it assures them of immediate rental income post-purchase.

The Case for Selling Tenanted

Selling a property with tenants in situ presents a unique set of benefits, especially for attracting investment buyers. This approach showcases the property as an immediate income-generating asset, potentially speeding up the sales process.

Let’s dig into how maintaining a tenanted property during the sales period can be advantageous, particularly in a market where investors are actively seeking properties with established rental histories.

Advantages of Selling Tenanted

1. Appeal to Investors: Properties with stable tenants can be more attractive to investors, as they guarantee immediate rental income.
2. No Staging Costs: Selling a tenanted property eliminates the costs associated with staging a vacant property.
3. Continuous Rental Income: You continue to receive rental income throughout the sale and settlement period.

Disadvantages of Selling Tenanted

1. Challenges in Inspection Scheduling: Coordinating inspections with tenants can be challenging, as it requires respecting their schedule and privacy.
2. Presentation Concerns: You have less control over the property’s presentation if the tenants are not particularly tidy or cooperative.
3. Potential Limitations for Owner Occupiers: If the tenant is on a fixed lease, it might deter owner-occupiers who wish to move in immediately.

Additional Considerations

1. Market Dynamics: Analyze the current market trends. If the market favors owner-occupiers, selling vacant might be more advantageous. Conversely, in a market with a high demand for investment properties, selling tenants could be beneficial.
2. Legal Frameworks: Be aware of the legalities involved in selling a tenanted property, such as notice periods and tenant rights, which vary by region.
3. Tenant Communication: Maintain open communication with your tenants if you decide to sell the property tenanted. This can smooth the process for both parties.

What Is The Difference Between a Tenant And An Occupier?

The difference between a tenant and an occupier lies primarily in their legal rights and agreements regarding the property they inhabit.

A tenant is someone who has entered into a formal agreement, usually a lease, with a landlord. This agreement grants the tenant certain rights to use the property for a specified duration in exchange for rent. 

Tenants have specific rights and responsibilities outlined in their lease agreement, which are protected by law. These include the right to a habitable living environment, the right to privacy, and the responsibility to pay rent and maintain the property.

An occupier, on the other hand, refers to someone who resides in a property but does not have the formal legal status of a tenant. Occupiers can include guests, family members, or friends who live in the property without a lease agreement. 

Their rights and protections are usually more limited compared to tenants, and they often lack legal claims to the property they occupy. Occupiers’ tenure in the property depends largely on the property owner’s permission rather than a legal contract.

Conclusion

Deciding whether to sell your property tenanted or vacant is not straightforward and depends on multiple factors, including your financial situation, the property’s condition, and market trends. Consulting with a real estate professional can provide valuable insights specific to your property and market conditions, helping you make the best decision.